by Robin Trimingham
If you have even a passing interest in real estate, you cannot help but have noticed that rental units from studio apartments to estate homes are in very short supply at the moment, with some experts estimating that the total inventory is currently one third smaller than it was in 2019.
While a variety of factors have contributed to this situation including an increase in the number of people coming to Bermuda as digital nomads or to set up companies, the conversion of some units to short-term vacation rentals or Air B&B listings, or a decision to let other family members live in the unit, there is such a demand for the few dwellings that are available that we are now in the midst of what those in the industry refer to as a “landlord’s market”.
As much as this might sound ideal if you own a rental unit, for a landlord, vetting multiple applications can be a confusing and even stressful task because getting the best price for a unit and finding the best tenant are not necessarily the same thing.
I sat down with one of Bermuda’s most active real estate rental agents, Kenneth Richardson of Coldwell Banker Bermuda Realty, to get his perspective on the current situation and learn some tips for finding good tenants.
“Two of the main reasons why tenants move is to downsize or alternatively because they need more space,” says Mr. Richardson.
“Many current tenants who are looking to make a move are very budget conscious, and it can take some time to find a property that fits their needs.”
“We maintain an active list of customers who are looking for a particular type of rental property and registering with an agent really streamlines the process for both tenants and landlords because it ensures that properties are shown to individuals who are right for them.”
If you have five or more applications that all appear equal on paper, how do you choose?
Not surprisingly, Mr. Richardson advises that you start with the basics.
“It might sound a little obvious but getting and actually checking references is essential when choosing a tenant,” he says. “You should always ask for three references – a personal reference, a reference from a previous landlord, and a work reference.”
These days it is also important to do a credit check as well as Google and social media searches when verifying the information supplied by a rental applicant. A simple online search can often confirm an employment history, but it may also reveal some surprising information regarding “why” a person is moving.
“It’s one thing to confirm that they have employment, but it is best to ask a prospective tenant lots of questions regarding why they are moving and the type of accommodation they are seeking, especially if they have just arrived on the island from a foreign country,” advises Mr. Richardson.
Regardless of the size of the property or the reason that it is being offered for rent, in many cases the unit is actually attached to the landlord’s own residence and, as a result, it is important for a landlord to carefully consider which applicant will be the best fit.
While a newcomer might have a bigger budget, someone who has experience living on the island will likely be savvier when it comes to handling issues such as dampness, insects, or hurricane season.
How important is it to work with a professional real estate agent?
Particularly on an island where many people know each other, using an agent is a great way to keep the process fair and keep the rental price confidential from all but qualified tenants.
“Using an agent to vet applicants, negotiate terms, and explain the various clauses of Bermuda’s rather lengthy lease agreements can save a lot of time and headaches when you receive multiple offers to rent,” says Mr. Richardson.
How do you ensure that things go well once the lease is signed?
Whether you are working with a rental agent or not, it is important for a landlord to meet with each new tenant in person at the property to explain how everything works and their expectations regarding the terms of the lease and property maintenance.
Particularly if you are going to be renting to a family member, be open and straight forward regarding payment terms and what will happen if your expectations are not met and then put everything in writing.
“There is no obligation on either party to proceed until the lease is signed by all parties and stamped,” Mr. Richardson cautions, “and remember that unstamped documents cannot be used as evidence in any proceeding.”
Perhaps the best advice for the landlord is to start well ahead of time and be patient. Looking for a suitable tenant a week or two before the lease is expected to commence is probably unwise. While a couple of months ahead of time may sound excessive, it may just prove to be the best choice in the long run.